New Chancellor Rachel Reeves has cancelled the long-awaited Stonehenge tunnel and Arundel bypass projects. Along with these, she has also cut around £1 billion of planned but "unfunded" transport projects due next year.
In her first speech to the House of Commons, Reeves criticised the previous government for not cancelling these projects, which were estimated to cost £1.7 billion and £455 million, “despite knowing full well they were unaffordable".
"If we cannot afford it, we cannot do it” she stated.
Reeves announced that Transport Secretary Louise Haigh will now conduct a "thorough review" of transport commitments, including road and rail projects. There was no mention of the 14-mile Lower Thames Crossing, projected to cost £9 billion, which is also expected to be cancelled.
These cuts are part of the new Labour government’s efforts to address a projected £22 billion budget overspend they inherited and to meet their own fiscal targets.
"This is not the statement I wanted to give today, and these are not the decisions I wanted to make, but they are the right decisions in difficult circumstances.” Reeves said.
Reeves promised a different approach from the previous Conservative government, which she claimed “made a series of promises on transport”, leading to over-budget and delayed projects.
“We will treat taxpayers’ money with respect by ensuring that every pound is well spent and we will interrogate every line of public spending to ensure it represents value for money,” she added.
Additionally, the Department for Transport’s budget may be reduced as part of a multi-year spending review, with stricter budgets set for at least three years. These will be announced in the Autumn Budget on October 30.
RAC policy chief Simon Williams commented that the budget cuts have “created more questions than answers” about fixing Britain’s roads. He noted, “The cancellation of the A27 Arundel bypass, from which Labour promised to allocate £320m for pothole repairs in its election manifesto, simply doesn’t scratch the surface of the problem.”
